State reviewing modified Preston loan proposal

Wednesday

Dec 5, 2012 at 12:01 AMDec 5, 2012 at 5:04 AM

Preston leaders have been in contact with the state about modifying a multi-million-dollar loan agreement, and a deal does not have to be struck by Thursday’s town meeting, First Selectman Robert Congdon said Monday.

JAMES MOSHER

Preston leaders have been in contact with the state about modifying a multi-million-dollar loan agreement, and a deal does not have to be struck by Thursday’s town meeting, First Selectman Robert Congdon said Monday.

“It would certainly help,” said Congdon, who has been town meeting moderator many times. “Hopefully, we’ll have an answer Wednesday or Thursday. But it’s not a deal-breaker if we don’t.”

Preston Redevelopment Agency leaders are looking to halve an $8 million loan plan that was defeated by voters 319-261 on Nov. 27. The agency would like the state Department of Economic and Community Development to agree to a $4 million package that would include a $2 million town matching component for environmental cleanup work at the former Norwich State Hospital property.

The department is considering the idea, spokesman David Treadwell said Monday.

“We are aware of the developments in Preston,” he wrote in an email. “We will continue our dialogue with town leaders and address this matter in the coming weeks.”

Agency Chairman Sean Nugent said a proposal was submitted to the state on Friday. Nugent said Monday he’s had “exchanges” with DECD Deputy Commissioner Ron Angelo about the matter.

U.S. Sen. Richard Blumenthal, D-Conn., has sent a letter supporting extension of a Dec. 1 deadline for receiving a $964,000 U.S. Economic Development Administration grant, Congdon said. The grant is in jeopardy because its matching component was tied to the defeated $8 million package. The town’s Redevelopment Agency and Board of Finance last week agreed to tie the grant to the modified loan proposal, pending approvals from the state government and town residents.

Congdon, who is a non-voting member of the Redevelopment Agency and also its finance officer, pointed out last week that redevelopment of the former hospital, now called Preston Riverwalk, is the No. 1 “Vital Municipal” project in the 2011 Regional Comprehensive Economic Development Strategy. The planning document was compiled by the Southeastern Connecticut Enterprise Corp., known as SeCTer.

Redevelopment moves have had consistent backing from the New London-based group.

“We at SeCTer have supported all previous grant applications to EDA and EPA by the PRA for cleanup funds,” Economic Development and Marketing Director Deborah Donovan said.

The $4 million package has the approval of the Board of Finance, including the possibility of asking for an identical $4 million at some future date. The $8 million was allowed to go to referendum by the finance board without its endorsement. Four members of the board criticized the loan plan publicly, helping cause its defeat, supporters say.

Board of Finance Chairman Robert Maurice resigned the day the loan was rejected at referendum, upset by his colleagues’ actions. Then-Vice Chairman Kenneth Zachem, who was among those voicing public criticism, has become acting chairman and last week called for closer teamwork among town boards.

Agency leaders are looking to keep other loan terms the same, including the first five years interest-free, a 1.5 percent annual rate after that and a $1 million forgiveness provision for every 100 full-time jobs created on the 393-acre site.

The town bought the property from the state in 2009 for $1. No development agreements have been finalized since then.